Cover Image
close this bookGATE - 4/93 - Botswana: Rural Industrial Development (GTZ GATE, 1993, 48 p.)
close this folderFocus
View the documentHow to initiate rural industrial development
View the documentRepublic of Botswana
View the documentPoverty and profits: The Work of RIPCO
View the documentSmall industry promotion in hard times: The Work of RIIC
View the documentMaximizing rural industrialization
View the documentAn innovation benefits women: The Sorghum Milling Project

Poverty and profits: The Work of RIPCO

by David Inger

The Rural Industries Promotions Company (RIPCO) is an NGO set up in 1975 to advise, assist and build up rural light industry by disseminating appropriate technologies on a commercial basis. The aim was to help the people in Botswana's rural regions who have remained poor in spite of the "economic miracle" - because rapid growth has not alleviated social inequalities.

Botswana is a country of startling contrasts. Often hailed as the economic miracle of Africa, it is true that the Government has trier to use the income from diamonds wisely. An excellent primary health care system has been established, together with the provision of education, safe water supplies, and extensive infrastructure. These facilities have improved the quality of life, but job creation and income creation have proved much more elusive.

Over half of Botswana's population live below the Poverty Datum Line, and there are immense inequalities of income. The ratio of income between the top 20% of the population and the bottom 20% shows that the top fifth earn 23 times more income than the bottom fifth. Out of a sample of 20 developing countries world-wide, Botswana comes second only after Brazil in terms of inequalities of income. There is an immense contrast between the "high life" of the modern enclave, with its conspicuous consumption, and the realities of great poverty in the rural areas. Women are particularly hard-hit, with over 50% of rural households being "female headed."

Going into business

The Rural Industries Promotions Company (RIPCO) is involved primarily in helping people in the rural areas to generate income, and in improving the quality of life. Many visitors however, are surprised to learn that RIPCO also operates a number of commercial companies aimed at making a profit, as well as creating employment. These operate under the auspices of the National Industries Promotions Company (NIPCO), a 100% owned subsidiary of RIPCO. In most of the companies NIPCO has a majority shareholding, in partnership with other entrepreneurs.

For many years the management and directors of RIPCO have believed that the methods of modern business companies are equally applicable to any other organization. Management accounting, strategic planning, information technology, and management information systems, can all contribute towards more success in achieving the goals of the organization, be these "developmental" or "commercial". We also believe that whilst our company has the clear primary mandate of helping the rural poor to become more self-suficicent, It is also necessary to keep in close contact with the business world in the urban areas. They too are involved in job creation, and many of these companies are doing it far more efficiently than development organizations.

A decision was made to privates some of the organizations activities, namely a sorghum mill which was used as a demonstration project for our milling technologies, and a carpentry shop which had been involved in research, but after some years was mainly involved in production. This was in recognition or the tact that research and development geared to rural development, and profit making companies, called for different styles of management, and that it was also desirable to have a clear separation between the two types of activity. Further, subsidiaries were added, including a company promoting solar technologies and involved in plastics and electronics. These companies were eventually consolidated under the National Industries Promotions Company, representing a clear division between the commercial and non-commercial activities. There are also investments in industrial and residential property, and a consultancy division.

Although these companies do not directly address the needs of the rural poor, they create a significant number of jobs, and in the very long-run through their profits will help reduce reliance on outside donors for development activities. They also help the organization to keep in touch with the business community, and modern business methods; and technology-based companies help the organization to remain at the cutting edge of innovative technology.

Innovate or die

In addition to a six year corporate strategic plan, which is revised every three years, RIPCO management is to develop a ten, and even a twenty year perspective. In that period development organizations must become more financially self-sufficient, they must expect to reduce staffing levels, and basically they must "innovate or die".

This also means that the staff of every organization have to be exposed to, and actively involved in, the corporate ethic of innovation. As I write this article, my Personal Secretary, a senior member of staff, has just made tea for me. The cleaner, the most junior member of staff who normally makes the tea, is doing data processing on the computer. Nobody suggested this to them. They just thought it would be a good idea to get the cleaner involved in information technology whilst the Secretary took over the more menial job for a while. A very small thing perhaps, but indicative of the flexibility that creative organizations need.

Tom Peters in his book called "Re-inventing Civilization" states that "curiosity power" is the key to success, and organizations must become more self-questioning, more knowledge-intensive, and less capital-intensive. The next decade will be the decade of the human mind. The Microsoft Corporation, with an annual turnover of $2 billion has shot past General Motors on the stock market, although the latter has a turnover of $ 124 billion. But as the New York Times pointed out "Microsoft's only factory asset is the human imagination."

We look forward to the opportunity to this magazine again in the year 2003, if it still exists. How many development organizations will have successfully responded to the challenges of survival, and how many will be forgotten dreams?

RIPCO - Rural Industries Promotions Company

The Rural Industries Promotions Company (Botswana) RIPCO (B) is a company limited by guarantee. It is charged with the prime mandate of improving rural living standards and creating rural employment through the development and dissemination of appropriate technologies, and provision of appropriate technical training, and commercial services.

The organization was established through the funding support of the Friedrich Ebert Foundation in Germany for a ten year period (1974-1984). Since then the organization's annual budget has been substantially funded by the Government of Botswana. The balance continues to be found from donor agencies (such as the GTZ/GATE), interested in supporting specific projects, and from the company's commercial operations.

The company operates as a parastatal under the portfolio responsibility of the Ministry of Commerce and Industry, and its policy decisions are formulated by a Board of Directors. The directors to the board are appointed by the Minister of Commerce and Industry, following a recommendation from the Managing Director with the approval of the substantive board. By tradition, the board chairperson has been the Permanent Secretary to the Ministry of Commerce and Industry. The nature of this relationship keeps the supervising ministry adequately informed of the company's performance.

RIPCO is headed by a Managing Director who coordinates and supervises all the subsidiaries through the respective General Managers.

The company's mandate is carried out through the following two branches:

- Rural Industries Innovation Centre (RIIC), located at Kanye in the Southern District of Botswana, acting as the national appropriate technology development and dissemination centre.

- The National Industries Promotions Company (NIPCO), providing business and consultancy support to subsidiaries and to other development organizations. The company comprises four subsidiaries: BORIIC (Pty) Ltd., which provides a sorghum milling service to the local market; Makwati Furniture (Pty) Ltd., manufacturer of high quality furniture; Solar Systems Afrique (Pty) Ltd., which manufactures a wide range of solar devices, to compete against imported products; the Pioneer Rural Industries Centre (PRICE) in Palapye in the Central District of Botswana which provides a range of integrated agricultural services through a "One Stop Service Centre for Agriculture" in addition to operating a conference centre.

Abstract

Despite the "economic miracle" in Botswana, there is still a great deal of social inequality in the country. Half the population live below the poverty line, the hardest-hit being inhabitants of rural areas. The NGO Rural Industries Promotions Company (RIPCO) was established in 1975 to help them. Originally a non-profit organization, RIPCO went into business. At first, "developmental" and "commercial" goals were pursued jointly, but soon a clear distinction was made between research and development geared to rural development and profit-making companies. The author reports on RlPCO's aims, working methods and development.

Resume

Le Botswana connait malgre le 'miracle economique' de profondes dispalites sociales. La moitie de la population vit au-dessous du seuil de pauvrete. La pauvrete sevit surtout dans les regions rurales. Pour aider les populations qui y vivent, il a ete cree en 1975 une organisation non gouvernementale a but non lucratif qui est 'venue aux affaires'. La co-habitation initiate d'objectifs 'de developpement' et 'commerciaux' a bientot fait place a une nette distinction entre la recherche et le developpement orientes vers le developpement rural et les societes a but lucratif. L'auteur decrit les objectifs, les methodes de travail et le developpement de RIPCO.

Extracto

A pesar del "milagro economico" hay en Botswana todavia grandes diferencias sociales. La mitad de la poblacion vive por debajo del limite de pobreza. Hay miseria sobre todo en las zones rurales. A fin de ayudarle a la gente que vive alla, se fundo en 1975 la organizacion no gubernamental Rural Industries Promotion Company (RIPCO), siendo esta una organizacion de desarrollo rural sin animo de lucro que se dedico al comercio. Luego de la combinacion inicial de objetivos de desarrollo y de comercio se produjo al cabo de poco tiempo una clara separacion entre la investigacion y el desarrollo, engranada con empresas de desarrollo rural con animo de lucro. El autor describe los objetivos, la labor y el desarrollo de RIPCO.